EU CRYPTO REGISTER · GLOSSARY · LAST VERIFIED
What is the prudential capital requirement for a CASP under MiCA?
MiCA Article 67 requires authorised CASPs to maintain prudential own funds at a level set by Annex IV, ranging from €50,000 to €150,000 of permanent minimum capital depending on the service class, plus a fixed-overhead requirement equal to one quarter of the previous year's fixed overheads.
What is the exact legal definition?
MiCA Article 67 and Annex IV set the prudential capital floor for CASPs by service class: Class 1 (€50,000) for reception/transmission of orders, advice, and placing; Class 2 (€125,000) for custody, exchange-for-funds, exchange-for-crypto, order execution, portfolio management, and transfer; Class 3 (€150,000) for operation of a trading platform. Source: Article 67 and Annex IV MiCA.
What does it actually mean in practice?
How the calculation works. A CASP's prudential own funds requirement is the higher of (a) the permanent minimum capital for its service class, or (b) one quarter of its previous year's fixed overheads. New CASPs use projected fixed overheads. The intent is to ensure capital scales with operational complexity.
What 'own funds' means. Tier 1 capital quality, broadly aligned with the Capital Requirements Regulation definitions: paid-in share capital, retained earnings, audited interim profits, less specified deductions. Subordinated debt does not count.
Reporting cadence. Article 68 requires CASPs to report compliance with the own-funds requirement to the home NCA at least annually, with prompt notification of any breach. Persistent breach is grounds for authorisation withdrawal under Article 64.
Why this matters for users. The capital floor is the buffer between operational losses and client-asset solvency. It is not a deposit-guarantee scheme; clients still rely on Article 70 segregation for their crypto-assets. But the capital floor reduces the probability that operational losses cascade into client-asset loss.
Where do we see this in the public record?
| Example | What it shows |
|---|---|
| Class 1 floor | €50,000 (advice, placing, reception/transmission) |
| Class 2 floor | €125,000 (custody, exchange, order execution, portfolio mgmt, transfer) |
| Class 3 floor | €150,000 (trading platform operation) |
| Fixed overhead component | One quarter of previous year's fixed overheads |
What else do users ask about this?
Is the capital requirement higher for larger CASPs?
Yes via the fixed-overhead-based component: a CASP with higher operating costs needs more capital. The permanent minimum is the floor, not the ceiling.
Can a CASP use insurance instead of capital?
Insurance can supplement capital for specific operational-risk coverages but cannot substitute for the permanent minimum. The own-funds floor is irreducible.
How is the capital monitored?
Annual reporting under Article 68, plus prompt breach notification. NCAs may require additional capital under their general supervisory powers if a CASP's risk profile justifies it.
Which sources is this entry based on?
- MiCA Article 67 - Prudential requirements
- MiCA Annex IV - Prudential capital floors by service class
- MiCA Article 68 - Governance, reporting, internal controls
- Regulation (EU) 2023/1114 (MiCA) on EUR-Lex
Glossary entries on The Crypto Register are sourced from primary legal texts (Regulation (EU) 2023/1114, ESMA guidelines, national regulator publications). They are not legal advice. Last verified .